Need To Know: The Consensus Just Cut Its PetroTal Corp. (CVE:TAL) Estimates For 2022

The analysts covering PetroTal Corp. (CVE:TAL) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the latest consensus from PetroTal's three analysts is for revenues of US$391m in 2022, which would reflect a major 42% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$469m of revenue in 2022. It looks like forecasts have become a fair bit less optimistic on PetroTal, given the substantial drop in revenue estimates.

See our latest analysis for PetroTal

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting PetroTal's growth to accelerate, with the forecast 101% annualised growth to the end of 2022 ranking favourably alongside historical growth of 63% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 0.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that PetroTal is expected to grow much faster than its industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for PetroTal this year. The analysts also expect revenues to grow faster than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of PetroTal going forwards.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with PetroTal's business, like recent substantial insider selling. Learn more, and discover the 2 other risks we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.